Brightcove + YouTube = Disruption

Brightcove's Brightcove Network, backed by AOL/Time Warner, Hearst and General Electric (NBC), is on the path to being a true game-changer in the broadcast media sector, say analysts at Mercator Capital. "It has become evident that IP is going to disrupt the broadcast sector in much the same way it has already reshaped telecom," they say. So how is Brightcove different from YouTube?

The Brightcove Network is a platform to allow professional creators of video content to bring their product to market in a commercially viable manner. It is a platform, a distribution channel and an ecommerce portal. YouTube’s content is essentially user-generated and not geared for a broadcast audience, whereas content running on the Brightcove Network is produced by professionals who are commercially driven and seeking an audience, says Mercator. "These are very different positions on the spectrum," Mercator says. At least for the moment, we'd say. YouTube's monetization model will be advertising. Brightcove's will be advertising and content sales. Mercator argues the two firms occupy different parts of the developing value chain, but we are not so sure, in at least one respect. YouTube ultimately will emerge as a distribution channel for professionally-created content.

"The underlying story here is that Brightcove is providing substantial validity to the Internet for being an important channel for video," says Mercator. "Brightcove is all about video content to be viewed on the Internet, and has little to do with television, as most people know it," Mercator says. "As such, Brightcove is not just expanding the pie, but they are potentially the foundation for an entirely new industry." We shall see. Aside from the "amateur" and "professional angles, there might be little fundamental difference between YouTube and Brightcove at the level of distribution. Google, of course, would not likely be found producing original content, so that is where the two ventures really are different.

Brightcove also might prove to be a vehicle for wider use of video-based advertising by companies priced out of the broadcasting or cable markets. More evidence of emerging "long tail" market segments, we'd say.